PM hardens line on Qantas

PM hardens line on Qantas - The West Australian

Tony Abbott has likened Qantas to another troubled Australian icon - Holden - in an ominous sign that sentiment for the Flying Kangaroo will not be enough to stop the Government attempting to cut the airline loose.

The Prime Minister's harder position on Qantas emerged on the eve of the airline revealing the state of its books. Qantas is today expected to announce a plan to slash thousands of jobs in a bid to cut $2 billion in costs.

Mr Abbott and senior ministers have been gingering up the airline to massively restructure its operations if it expects the Government to guarantee its debt.

The Government is reluctant about extending a debt facility to Qantas but knows it has no realistic prospect of getting changes to the Qantas Sale Act through the Senate any time soon.

This 1992 legislation limits foreign ownership in Qantas at 49 per cent and forces the airline to keep its maintenance, catering and administration in Australia.

The Palmer United Party, the Greens and Labor won't support changes to the Qantas Sale Act.

If Qantas was allowed to have maintenance and catering done offshore, up to 10,000 jobs would be lost. Shadow transport minister Anthony Albanese said: "Its Australian-based activity means Australian-based jobs."

Mr Abbott, who would need six non-coalition senators to secure changes, said the Government wanted to establish a "level playing field" for Qantas.

"We want to ensure that Qantas management, as far as is humanly possible, don't have any gov-ernment-imposed ball and chain around their ankles and that's the problem with the Sale Act," he said.

"It's a significant restriction on Qantas' freedom to manoeuvre."

Mr Abbott denied there was any "secret deal" between the Government and the airline.

"There is no such deal," he said. "We would never enter any such arrangement and whatever Qantas does is entirely a matter for the management of Qantas."

He noted that 75 per cent of Australians travelled overseas on airlines other than Qantas.

"We know that the percentage of Australians buying cars made in Australia has dropped and dropped and dropped, despite the fact many of us remain sentimentally attached to Holden or Ford," Mr Abbott said.

"So, look, in the end, the job of government is to do what we can to enable all Australian businesses - iconic or not so iconic, as the case may be - to flourish."